Thursday, April 26, 2007

Say Goodbye To Free Banking

This was covered on GMTV and the BBC this morning although in quite different ways.

The GMTV approach was to say that banks are going to charge and they're a bunch of cooonts. No explanation of why they are going to charge, not a big surprise from the program that was running detailed guides and features on how to recover the "unfair" charges banks had been charging stupid people (i.e. their average viewer) for performing unauthorised transactions with their bank accounts. Not a single mention of WHY the banks were trying to implement monthly charges for all current accounts.

The BBC approach delivered by their business expert was to explain that the OFT (Office of fair trading) was investigating claims by banks that they would require to charge for accounts IF they were not allowed to charge for going overdrawn etc. Cause and affect people, whinging people not wanting to take responsibility for their own lack of financial management being the cause, charges for everybody including those running their accounts within the agreement set out between them and the bank being the affect. The BBC concluded that it was likely that the OFT would agree with the banks as charges could be seen as a good way of increasing competition between the banks.

What really pisses me off about all this is that in this day and age you need a bank account. Cash is slowly being phased out, even cheques are rarely used except for business to business payments. If you want to get paid by your employer, you need a bank account, either to accept the electronic payment or to deposit the cheque (do banks still cash cheques for people without accounts?). So thanks to Mr I'm Going To Sue the Bank Because I Broke My Agreement With Them, most people in employment in the UK will soon have the pleasure of taking home less of their pay. Overnight your monthly net income is going to drop by however much the banks choose to charge for each account you run. In the coming times of higher interent rates this means even less disposable income, or in many cases less money to pay the bills. People who manage their bills via direct debit, ensuring that they only spend what they have and budgeting on a monthly basis are gonna get screwed.

I'm not even going to go into charges per transaction, that's another joy that we can all look forward to in the near future.

It's still all about the code man, although these days most of it seems to be written already (god bless .net)

It's people like you and me that are going to end up worse off. Paying month by month for banking is going to end up costing much more over time than the odd penalty. But even if that wasn't the case it's the knock on that's going to screw us. The DHSS (which doesn't have a lot of money, at all) knows that paying people benefits by BACS is much cheaper than any other type of payment. It's been trying to sneakily get people to switch to BACS for years but it struggles, one of the main problems being people refusing to open bank accounts. If it's hard now how hard is it going to be when the banks charge for an account? One of 2 things will happen, people refuse to accept benefits by BACS and so the cost of paying the benefits increases a huge amount OR we have to increase the benefits to null the banks charges and the costs of benefits goes up. Either way the cost of paying benefits goes up, now in an extremely generous (far more generous than the UK) social micro economy like ours we're not talking about a few pound here, and the impact on us low end tax payers could be a real pain in the arse. So not only are you going to be paying your own monthly bank chrages but your tax is going to pay for all the scummers to have a bank account as well.